NSW club pokie profits up by $9500 per machine

Confidential reports show NSW clubs pulled in $9500 more profit from each of their poker machines last year than they did in 2011.

At the 25 most profitable clubs in the state, 8900 machines returned annual profits of about $100,000 or $275 per day, a report by consultants PKF, obtained by the Herald shows. An average NSW club made $158 per pokie per day, during the November 2017 quarter, up from $132 in 2011, PKF reported.

Under new rules, introduced in March this year, pubs and clubs can lease machines from other clubs or hotels without having to forfeit some of them in the process. There are also new "high-risk areas" where no new machines can be introduced.

A ClubsNSW spokesman said the rules are "stricter and better targeted" by focusing on socio-economic disadvantage to determine what is a medium-risk and high-risk area.

Of the 52 clubs who did increase their number of gaming machines in the last six months of 2017, only three were in the top 20 clubs by profit-per-machine, the spokesman said.

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"In two of those three cases, the clubs in question were in the high risk areas and therefore could have only obtained the additional machines from another club within their Local Government Area," he said.

Aristocrat Lightning Link poker machine.Credit:Peter Braig

Despite consistent reductions in poker machines, including 619 machines in the six months to December 2017, they continue to generate revenue and profits with annual growth in turnover (bets made in the machines) at NSW Clubs up 0.5 percent to $55 billion in the year to November 30, 2017, PKF reported.

Greens MLC Justin Field said pokies regulation is "well and truly broken in NSW".

"Nowhere else in the world have poker machines been pushed into community pubs and clubs in this way,” Mr Field said. “The vast profits of the pokies industry in NSW are built on exploiting vulnerable people and communities."

“The new lease arrangements [introduced in March] will make it far easier for machines to be moved within the state and those communities already struggling under the weight of gambling losses will suffer more," Mr Field said.

The top 20 clubs ranked by net profit per machine added 30 pokies in the six months to December 2017 and the largest 190 Clubs, those with more than 100 pokies, had more machines than they did in June 2017, Liquor and Gaming NSW data shows.

A Clubs NSW spokesman said the reforms balance the need to reduce problem gambling while also ensuring the viability of the state’s clubs - 40 percent of which are "showing signs of financial distress".

"While the anti-gambling lobby likes to suggest large numbers of machines are moving from low-margin clubs to high-margin clubs, the figures prove many machines are being taken out of service altogether."

A "holistic assessment of gaming in all clubs and hotels" as well as socio-economic factors were considered when changing the rules and boundaries that classify high and low-risk areas, a Clubs NSW spokesman said.

"This is the most appropriate approach to assess harm and, coupled with a transfer regime that restricts new poker machines from moving into at-risk areas, means NSW has a system which facilitates industry growth in low-risk areas and ensures harm minimisation in high-risk areas," he said.

Five of the top ten NSW clubs ranked by total net profit are located in 'high risk' areas.

NSW Minister for Racing Paul Toole said the Greens are "misleading the community" by cherry-picking facts.

"The Government’s reforms have put a stronger focus on actual risks of gambling harm in local areas rather than raw numbers of gaming machines," Mr Toole said.

"The reforms require broader community consultation for longer periods, including cases where gaming machines are being transferred between clubs." With Nick O'Malley.